Zimbabwe to levy foreign companies in reserved sectors

Government has ordered foreign companies operating in reserved sectors of the economy to pay an empowerment levy by January next year, while new investments in that area have been stopped, except in cases where the investors are bringing in new technologies.

Addressing people at the first national empowerment conference in Harare yesterday, Youths, Indigenisation and Economic Empowerment Minister, Patrick Zhuwao said new investors in reserved sectors should apply to specific sector ministries for approval.

"It is no longer automatic that if you apply to invest in the reserved sector you will get approval," he said. "Now we send your application to the sector specific ministry that has to approve whether the technology you are bringing is necessary for you to be given the certificate."

Minister Zhuwao said Government was aware that several companies were operating in reserved sectors and as such an empowerment levy subject to reduction by levels of indigenisation would be charged. "No new non-indigenous businesses are to invest into the (reserved) sector except for the legally acceptable exceptions such as investors bringing in new technology," he said.

"However, the reality is that there are already existing non-indigenous businesses within the reserved sector. These may continue to operate while paying the Empowerment Levy.

"They will only earn an Indigenous Shareholding Rebate, measures between zero percent to 100 percent based on their level of indigenisation. Therefore, if a business in the reserved sector is 33 percent indigenous then it will earn a 33 percent rebate on the Empowerment Levy and if that business decides to indigenise further to the extent of 75 percent then likewise it will earn a 75 percent rebate."

Turning to the $10 million Cabs Youth Empowerment Fund, Minister Zhuwao said all youths who failed to repay their loans should make payment plans before the end of the year, failure of which they will be dragged to court. He applauded those who have repaid their loans to the tune of $1,7 million.

"I don't want to defend people who do not pay back loans," he said. "Those who have not repaid the loans should go to Cabs and make payment plans before the end of the year. "To Cabs I say for those who fail to make such plans you can proceed to take them to court by January next year."

Ms Lilian Mbayiwa from Old Mutual acknowledged that the Cabs Youth Empowerment Fund encountered several challenges and as such they had suspended all interest charges on the loan accounts. "In light of the challenges faced by beneficiaries in servicing their loans, the Youth Fund has suspended all charges on loan accounts," she said.

"These charges included interest and late payment penalty charges. As a result, whatever deposit, however small, will result in a net reduction of the beneficiary's loan amount. "It is heartening to report that there are some success stories coming out of this fund. "Some beneficiaries have paid up their loans and these amount $1,7million.

"This amount will be re-disbursed to the districts from which the repayments were made. "We therefore urge recipients to repay the loans to allow other projects in their districts to benefit from the fund."